Outline

Overview

The unit provides an introduction to heterodox approaches to macroeconomics. This entails a fundamental departure from mainstream (i.e. marginalist) theoretical foundations. Lectures begin with the implications of a modern classical/Sraffian perpectives for the theory of value and distribution, including the explanation of the real wage and the rate of interest. This necessarily points to the celebrated capital-theoretic critique of traditional approaches to the theory of output and employment. Lectures proceed to alternative (demand-led) perspectives on growth, including discussion of modern Kaleckian and multi-commodity models, as well as heterodox views on macroeconomic policy.

Unit details and rules

Academic unit	Economics
Credit points	6
Prerequisites ?	(ECOS2001 or ECOS2901) and (ECOS2002 or ECOS2902 )
Corequisites ?	None
Prohibitions ?	None
Assumed knowledge ?	None
Available to study abroad and exchange students	Yes

Teaching staff

Coordinator	Graham White, g.white@sydney.edu.au

Type	Description	Weight	Due	Length
Final exam (Record+)	Final Exam Final Exam	60%	Formal exam period	2 hours
Outcomes assessed:
In-semester test (Record+)	Mid-Semester Exam # 1 Mid-semester exam	20%	Week 08 Due date: 08 Oct 2021 at 18:00 Closing date: 08 Oct 2021	1 hour
Outcomes assessed:
In-semester test (Record+)	Mid-Semester Exam # 2 Mid-semester exam	20%	Week 09 Due date: 15 Oct 2021 at 18:00 Closing date: 15 Oct 2021	1 hour
Outcomes assessed:
= Type B final exam ? = Type B in-semester exam ? = Type B in-semester exam ?

Assessment summary

Mid-Semester Exam # 1: Will likely be multple choice – proctored exam, late penalties not applicable
Mid-Semester Exam # 2: Will likely be essays – proctored exam, late penalties not applicable
Final Exam: Will likely be a combination of multiple choice and essays – proctored exam, late penalties not applicable

Assessment criteria

Result	Mark range	Description

HD	85-100	To be awarded to students who, in their performance in assessment tasks, demonstrate the learning outcomes for the unit at an exceptional standard as defined by grade descriptors or exemplars established by the faculty
D	75-84	To be awarded to students who, in their performance in assessment tasks, demonstrate the learning outcomes for the unit at a very high standard as defined by grade descriptors or exemplars established by the faculty.
CR	65-74	To be awarded to students who, in their performance in assessment tasks, demonstrate the learning outcomes for the unit at a good standard as defined by grade descriptors or exemplars established by the faculty.
P	50-64	To be awarded to students who, in their performance in assessment tasks, demonstrate the learning outcomes for the unit at an acceptable standard as defined by grade descriptors or exemplars established by the faculty.
F	0-49	To be awarded to students who, in their performance in assessment tasks, fail to demonstrate the learning outcomes for the unit at an acceptable standard established by the faculty. This grade, with corresponding mark, should also be used in cases where a student fails to achieve a mandated standard in a compulsory assessment, thereby failing to demonstrate the learning outcomes to a satisfactory standard. In such cases the student will receive the mark awarded by the facultyup to a maximum of 49.

For more information see guide to grades.

Late submission

In accordance with University policy, these penalties apply when written work is submitted after 11:59pm on the due date:

Deduction of 5% of the maximum mark for each calendar day after the due date.
After ten calendar days late, a mark of zero will be awarded.

This unit has an exception to the standard University policy or supplementary information has been provided by the unit coordinator. This information is displayed below:

All assessments are proctored exams, late penalties not applicable

Academic integrity

The Current Student website provides information on academic integrity and the resources available to all students. The University expects students and staff to act ethically and honestly and will treat all allegations of academic integrity breaches seriously.

We use similarity detection software to detect potential instances of plagiarism or other forms of academic integrity breach. If such matches indicate evidence of plagiarism or other forms of academic integrity breaches, your teacher is required to report your work for further investigation.

Use of generative artificial intelligence (AI) and automated writing tools

You may only use generative AI and automated writing tools in assessment tasks if you are permitted to by your unit coordinator. If you do use these tools, you must acknowledge this in your work, either in a footnote or an acknowledgement section. The assessment instructions or unit outline will give guidance of the types of tools that are permitted and how the tools should be used.

Your final submitted work must be your own, original work. You must acknowledge any use of generative AI tools that have been used in the assessment, and any material that forms part of your submission must be appropriately referenced. For guidance on how to acknowledge the use of AI, please refer to the AI in Education Canvas site.

The unapproved use of these tools or unacknowledged use will be considered a breach of the Academic Integrity Policy and penalties may apply.

Studiosity is permitted unless otherwise indicated by the unit coordinator. The use of this service must be acknowledged in your submission as detailed on the Learning Hub’s Canvas page.

Outside assessment tasks, generative AI tools may be used to support your learning. The AI in Education Canvas site contains a number of productive ways that students are using AI to improve their learning.

Learning support

Simple extensions

If you encounter a problem submitting your work on time, you may be able to apply for an extension of five calendar days through a simple extension.  The application process will be different depending on the type of assessment and extensions cannot be granted for some assessment types like exams.

Special consideration

If exceptional circumstances mean you can’t complete an assessment, you need consideration for a longer period of time, or if you have essential commitments which impact your performance in an assessment, you may be eligible for special consideration or special arrangements.

Special consideration applications will not be affected by a simple extension application.

Using AI responsibly

Co-created with students, AI in Education includes lots of helpful examples of how students use generative AI tools to support their learning. It explains how generative AI works, the different tools available and how to use them responsibly and productively.

Weekly schedule

WK	Topic	Learning activity	Learning outcomes
Weekly	See Additional Information for Lecture Topics and Reading Guide	Lecture and tutorial (3 hr)

Attendance and class requirements

PLEASE NOTE: Your grade for this unit will be based on your understanding of lecture material and that understanding requires a serious commitment to attendance at lectures and Q&A sessions as well as doing the required reading.

As later year students, I expect nothing less than regular attendance at classes, whether this attendance is in person or remote via Zoom.

Graham White

Unit Co-ordinator

Study commitment

Typically, there is a minimum expectation of 1.5-2 hours of student effort per week per credit point for units of study offered over a full semester. For a 6 credit point unit, this equates to roughly 120-150 hours of student effort in total.

Required readings

ECOS3031 HETERODOX PERSPECTIVES ON MACROECONOMICS

PROGRAMME AND READING GUIDE

The unit provides an introduction to heterodox approaches to macroeconomics. This entails a fundamental departure from mainstream (i.e. marginalist) theoretical foundations. Lectures begin with an historical overview of the development of modern macroeconomics as well as a discussion of the implications of a modern classical/Sraffian perpectives for the theory of value and distribution, including the explanation of the real wage and the rate of interest. The latter analysis necessarily informs subsequent discussion of the celebrated capital-theoretic critique of traditional approaches to the theory of output and employment. Lectures proceed to alternative (demand-led) perspectives on growth, including discussion of modern Kaleckian and multi-commodity models, as well as heterodox views on macroeconomic policy.

There are two hours of lectures each week and PLUS an additional hour each week which will be used as a question and answer session and which follows immediately after the lecture. Questions relating to lecture material will also be posted on Canvas at the end of each major topic. Students are advised to attempt these questions as a means of coming to grips with the course material.

As later year students, I expect nothing less than regular attendance at classes, whether this attendance is in person or remote via Zoom.

LECTURE TOPICS

Topic 1: Background: two traditions in the theory of output

Traditional (Wicksellian) macroeconomics, capital theory and the theory of the rate of interest
Keynes’s challenge and the principle of effective demand
Development of macroeconomics since the General Theory

Reading:

Garegnani P. (1990), “Quantity of capital”, in Eatwell J., Milgate M. and Newman P. (eds), The New Palgrave: Capital Theory, UK: Palgrave Macmillan, pp. 1 – 11.

P. Garegnani (1978-79), ‘Notes on consumption, investment and effective demand’, Cambridge Journal of Economics, Part I Vol. 2, No. 4, December; Part II, Vol.3, No. 1, March.

Blanchard O. (2008), ‘Neoclassical synthesis’, in Durlauf S. N. and Blume L. (eds) 2nd Edition The New Palgrave Dictionary of Economics, 2nd Edition, Basingstoke: Palgrave Macmillan (hereafter NP2).

Mankiw N.G. (1990), ‘A Quick Refresher Course in Macroeconomics’, Journal of Economic Literature, Vol. 28, Issue 4, December, 1645-1660.

Kurz H. D. (2010), ‘On the dismal state of a dismal science?’, Investigación Económica, Vol. 69, No. 274 (octubre-diciembre de 2010), pp. 17-41 (https://www.jstor.org/stable/42779598).

Topic 2: Heterodox foundations: some building blocks for subsequent discussion

Relative prices and distribution in a simplified multi-commodity setting
Choice of technique

Reading:

Pasinetti, L.L. (1977), Lectures in the Theory of Production. London: Macmillan, Ch.’s 2 & 3.

Garegnani, P. (1987), "Surplus approach to value and distribution". In Eatwell J., Milgate M. and Newman P. (eds.), The New Palgrave: A Dictionary of Economics. London: Macmillan (hereafter NP1), Vol. IV, pp. 560-563.

Eatwell J. (1987), “Competition: classical conceptions”. NP1, Vol. I pp. 537 – 540.

Topic 3: Capital-theoretic issues and conventional macroeconomic theory

The aggregate production function
The aggregation of capital and the theory of distribution
Capital theory debates and the traditional theory of output
Capital theory debates and new Keynesian variations on traditional theory

Reading:

Garegnani, P. (1970), "Heterogeneous Capital, the Production Function and the Theory of Distribution", Review of Economic Studies, 37, pp. 407-416.

Shaikh A. (1974), “Laws of Production and Laws of Algebra: The Humbug Production Function”, The Review of Economics and Statistics, Vol. 56, No. 1, (Feb., 1974), pp. 115-120.

Garegnani P. (1990), “Quantity of capital”, in Eatwell J., Milgate M. and Newman P. (eds), The New Palgrave: Capital Theory, Norton & Co, pp. 1 – 11.

Kurz H.D. (1987), "Capital theory: debates". NP, Vol. I, pp. 357-363. ( A more in-depth version of this Palgrave entry can be found in Kurz and Salvadori, Theory of Production : A Long-Period Analysis. Cambridge: Cambridge University Press,Ch. 14, pp. 427-455).

Petri F. (2004), General Equilibrium, Capital and Macroeconomics: A Key to Recent Controversies in Equilibrium Theory, Cheltenham: Edward Elgar, Ch. 7, pp. 259-268.

Petri F. (2015), ‘Neglected Implications of Neoclassical Capital-Labour Substitution for Investment Theory: Another Criticism of Say’s Law’, Review of Political Economy, vol. 27, No. 3, pp 308-340.

White G. (2015), ‘The new Keynesian view of aggregate demand: some reflections from a classical-Sraffian standpoint’, Cambridge Journal of Economics, Vol 39, No.3, May, pp. 826-830.

Fratini S.M. (2018), “On the Second Stage of the Cambridge Capital Controversy”, Centro Sraffa Working Papers, No. 30, April.

Topic 4: Demand-constrained approaches to output and the theory of growth

Kalecki’s ‘version’ of the principle of effective demand and the trade cycle
Cambridge – post-Keynesian views of distribution and growth
Kalecki on long-run growth
Modern Kaleckian explanations of growth
Normal versus steady state capacity utilization

Reading:

Blecker R.A. (2002), ‘Distribution, demand and growth in neo-Kaleckian macro-models’, in Setterfield M. (ed), The economics of demand-led growth : challenging the supply-side vision of the long run. Cheltenham : Edward Elgar, pp. 129-138.

Cesaratto S. (2015), “Neo-Kaleckian and Sraffian Controversies on the Theory of Accumulation”, Review of Political Economy, Vol.27, No.2, Sections 2 - 4.

Topic 5: Modern classical approaches to value and distribution and demand-led growth

Sraffa prices, accumulation and “normal” utilization
The “super-multiplier” approach
“Sraffian” versus Kaleckian approaches to demand-led growth
Steady state analysis and demand-led growth

Reading:

Vianello F. (1985), “The Pace of Accumulation”, Political Economy: Studies in the Surplus Approach, Vol.1, No.1.

Cesaratto S., Serrano F. and Stirati A., (2003), ‘Technical Change, Effective Demand and Employment’, Review of Political Economy, Vol. 15, No.1, pp. 33 - 52.

White G. (1989), “Normal Prices and the Theory of Output: Some Significant Implications of Recent Debate ”, Political Economy: Studies in the Surplus Approach, Vol.5, No.2.

Cesaratto S. (2015), “Neo-Kaleckian and Sraffian Controversies”, op.cit., Sections 5 and 6.

Trezzini and Palumbo (2003), “Growth without Normal Capacity Utilization”, European Journal of the History of Economic Thought, Vol. 10, 109-135.

White G. (2006), “Demand-led growth and the classical/Sraffian approach to value and distribution: Are they compatible?” in Salvadori N. (ed), Economic Growth and Distribution: On the Nature and Cause of the Wealth of Nations, London: Edward Elgar.

Topic 6: Policy issues and heterodox perspectives on macroeconomics

Heterodox macroeconomics and the labour market
The role of the concept of potential output
Secular insufficiency of demand without the negative natural rate of interest
Monetary and fiscal policies from a heterodox perspective

Reading:

White G. (2010), “Labour, Commodities and the Labour Market: A Heterodox Perspective” The Economic and Labour Relations Review, Vol. 21 No. 1, pp. 89–104.

Palumbo A. (2015), ‘Studying Growth in the Modern Classical Approach: Theoretical and Empirical Implications for the Analysis of Potential Output’, Review of Political Economy, Vol. 27, No. 3, 282-307.

Di Bucchianico S. (2020), ‘Discussing secular stagnation: A case of freeing good ideas from theoretical constraints’, Structural Change and Economic Dynamics, Vol. 55, pp.288-297.

Girardi D., Meloni W. and Stirati A. (2020), ‘Reverse hysteresis? Persistent effects of autonomous demand expansions’, Cambridge Journal of Economics, Vol. 44, pp.835-869.

Marc Lavoie (2013), “The Monetary and Fiscal Nexus of Neo-Chartalism: A Friendly Critique”, Journal of Economic Issues, Vol. 47, No. 1, 1-32.

Palley T. (2015), ‘Money, Fiscal Policy and Interest Rates: A Critique of Modern Monetary Theory’, Review of Political Economy, Vol. 27, No. 1, pp. 1 – 27.

Learning outcomes

Learning outcomes are what students know, understand and are able to do on completion of a unit of study. They are aligned with the University's graduate qualities and are assessed as part of the curriculum.

Outcomes
Graduate qualities

At the completion of this unit, you should be able to:

LO1. Demonstrate openness to new ways of thinking and appreciate the importance of intellectual curiosity and reflection as the foundation for continuous learning
LO2. Critically evaluate underlying theories, concepts, assumptions, limitations and arguments in economics; exercise critical judgement and critical thinking to create new modes of understanding
LO3. Develop coherent arguments when recommending solutions and critically evaluating theories in economics

Graduate qualities

The graduate qualities are the qualities and skills that all University of Sydney graduates must demonstrate on successful completion of an award course. As a future Sydney graduate, the set of qualities have been designed to equip you for the contemporary world.

GQ1	Depth of disciplinary expertise Deep disciplinary expertise is the ability to integrate and rigorously apply knowledge, understanding and skills of a recognised discipline defined by scholarly activity, as well as familiarity with evolving practice of the discipline.
GQ2	Critical thinking and problem solving Critical thinking and problem solving are the questioning of ideas, evidence and assumptions in order to propose and evaluate hypotheses or alternative arguments before formulating a conclusion or a solution to an identified problem.
GQ3	Oral and written communication Effective communication, in both oral and written form, is the clear exchange of meaning in a manner that is appropriate to audience and context.
GQ4	Information and digital literacy Information and digital literacy is the ability to locate, interpret, evaluate, manage, adapt, integrate, create and convey information using appropriate resources, tools and strategies.
GQ5	Inventiveness Generating novel ideas and solutions.
GQ6	Cultural competence Cultural Competence is the ability to actively, ethically, respectfully, and successfully engage across and between cultures. In the Australian context, this includes and celebrates Aboriginal and Torres Strait Islander cultures, knowledge systems, and a mature understanding of contemporary issues.
GQ7	Interdisciplinary effectiveness Interdisciplinary effectiveness is the integration and synthesis of multiple viewpoints and practices, working effectively across disciplinary boundaries.
GQ8	Integrated professional, ethical, and personal identity An integrated professional, ethical and personal identity is understanding the interaction between one’s personal and professional selves in an ethical context.
GQ9	Influence Engaging others in a process, idea or vision.

Outcome map

Learning outcomes	Graduate qualities
Learning outcomes

Responding to student feedback

This section outlines changes made to this unit following staff and student reviews.

This is the first time this unit has been offered.

Disclaimer

The University reserves the right to amend units of study or no longer offer certain units, including where there are low enrolment numbers.

To help you understand common terms that we use at the University, we offer an online glossary.

Current students

Overview

Overview

Unit details and rules

Teaching staff

Assessment

Assessment

Assessment summary

Assessment criteria

Late submission

Academic integrity

Learning support

Learning support

Simple extensions

Special consideration

Using AI responsibly

Weekly schedule

Weekly schedule

Attendance and class requirements

Study commitment

Required readings

Learning outcomes

Learning outcomes

Graduate qualities

Outcome map

Responding to student feedback

Responding to student feedback

Disclaimer

On this page

Useful links

Media

Student links

About us

Connect

Current students

ECOS3031: Heterodox Perspectives on Macroeconomics

Semester 2, 2021 [Normal day] - Camperdown/Darlington, Sydney

Overview

Overview

Unit details and rules

Teaching staff

Assessment

Assessment

Assessment summary

Assessment criteria

Late submission

Academic integrity

Learning support

Learning support

Simple extensions

Special consideration

Using AI responsibly

Weekly schedule

Weekly schedule

Attendance and class requirements

Study commitment

Required readings

Learning outcomes

Learning outcomes

Graduate qualities

Outcome map

Responding to student feedback

Responding to student feedback

Disclaimer

On this page

Useful links

Media

Student links

About us

Connect